Islamic Finance in Sub-Saharan Africa: Status and Prospects

This paper provides a survey on Islamic Finance in SSA. Ongoing activities include Islamic banking, Sukuk issuances (to finance infrastructure projects), Takaful (insurance), and microfinance. While not yet significant in most Sub-Saharan countries, several features make Islamic finance instruments relevant to the region, in particular the ability to foster SMEs and micro-credit activities. As a first step, policy makers could introduce Islamic financing windows within the conventional system and facilitate Sukuk issuance to tap foreign investors. The entrance of full-fledged Islamic banks require addressing systemic issues, and adapting the crisis management and resolution frameworks.